Colombia is the eighth country in Latin America to mandate electronic invoicing. This latest requirement from Colombia comes as no surprise as Colombia has been planning to standardize electronic invoicing for the past decade, starting with decree 1929 in 2007. The old model had a few flaws and in 2013 the DIAN (tax authority) proposed a new model similar in scope and complexity to Brazil, Mexico and Chile. That model was finally passed and approved by the DIAN on November 24th, 2015, officially mandating electronic invoicing for 2016.
Colombia’s objective for its electronic invoicing program is to strengthen its tax and fiscal policies so that it can minimize tax evasion -- it’s estimated that tax evasions cost Colombia 10 billion pesos each year (read previous blog for more details).
In February 2016, the DIAN released the technical specifications for its electronic invoicing model. The comprehensive 269-page document contains the details that companies need to be aware of when implementing electronic invoicing.
Below is a timeline of events in Colombia to provide some background and key dates going forward to help you plan ahead:
- May 2007: The foundation for electronic invoicing was passed by Colombia with the decree 1929.
- December 2013: The DIAN published a draft of the decree with the plan to implement electronic invoicing across Colombia. The draft was based on the electronic invoicing model that is in place in Brazil, Mexico and Chile. Learn more.
- March 2014: The Inter-America Development Bank (IDB) approved a $12 million loan so that Colombia could implement electronic invoicing, with the goal of increasing the country’s tax collections.
- November 2015: The Colombia DIAN (tax authority) announces in Decree 2242 that electronic invoicing will be mandated for specified companies starting January 2016.
- January 2016: Pilot phase began with companies that have volunteered.
- February 2016: Detailed technical specifications released by the DIAN. Learn more.
- March-May 2016: The DIAN will select mandated companies in the “Catalog of participants.”
- December 2017: On December 31st, the old model of electronic invoicing from decree 1929 will be discontinued.
The goal is to have all companies doing business in Colombia to be live on electronic invoicing by the end of 2017.
If you are a multinaltional with operation in Colombia you need to start preparing for an inevitable rollout as the Colombian DIAN is right on track in mandating the first wave of companies prior to the summer of 2016 with a go live date no later then the end of the year.
As you start evaluating e-invoicing solutions remember that this is not just a local problem but a regional one with eight countries in LATAM now mandated. Just like in the rest of Latin America, there are serious business implications that go beyond the transmission of e-invoices. It’s important that your Latin American e-invoicing partner realize that any issues can shut down your business and severely affect your bottom line and work with you to ensure seamless compliance.